A new study from CIPS explores two possible futures for procurement and supply. What we do now will affect what we live with in the future. This report is your call to arms, say the authors
What will the supply landscape look like in 15 years, and how can professionals prepare themselves for the future, when coping with the present is often challenging enough? These are the questions addressed by The Future of Procurement and Supply Management, a new academic study from CIPS, produced with Aston University and the University of Liverpool, which presents two potential scenarios for the future.
The study’s findings were generated through in-depth discussions, workshops, interviews and focus groups with procurement professionals and industry experts, backed up with academic literature reviews. “There are two key dimensions for change: systems and the supply landscape,” says Dr Louise Knight, from Aston University, and one of the report’s authors. The two scenarios, Titans and Networked, are very different.
“Titans is shaped by the concentration of markets, inspired by the rise of Amazon” explains Knight. “It represents the ‘Amazonification’ of how we buy and interact with products and services.” For procurement in this world, strategy becomes more focused on “managing risk, managing at speed, on-boarding and off-boarding suppliers quickly,” says report co-author Dr Jo Meehan from the University of Liverpool.
She adds: “It’s not just about speed, but some of the principles that sit behind it: how relevant are our contracts in a rapid environment where we are almost buying as consumers? Procurement is trying to build stability into contracts and slowing things down, while the market is trying to speed things up. I don’t think those questions are being asked enough in terms of how we futureproof what we do.”
The Networked scenario invokes a more evenly distributed commercial power across our supply landscape, says Knight. “You’ve got a different market problem when [economic power] is distributed. More attention is given to different stakeholders and the impact decision-making has on other parties, slowing things down.”
It’s not necessarily a utopian counterpoint, because there are issues that come with it, points out Meehan. “Innovation is much slower. Collaboration sounds lovely as an ideal, but it can be fraught with tension in reality. [This scenario] requires a different set of skills. It’s about your ability to influence rather than lead, and that can be a much harder task.”
The two scenarios, explored in detail in the report, are intended to be contrasting provocations rather than solid predictions of the future. What Knight and Meehan want to see from the procurement profession is proactive consideration of how to shape the future, rather than sleepwalking into it.
“A skill that is lacking in the profession is thinking how we can get to this future focused vision,” says Meehan. “Because that’s true influence: how we shape the future we would like. We need to think about what our future could be, beyond ‘we need to be strategic and at the top table’.”
The fact is – both agree – procurement professionals have the power to shape the future. “Think about the buying power of organisations,” says Knight. “A lot of the buying decisions we are making now are going to shape the market for the future. The whole profession should be paying more attention to what opportunities there are. How we buy changes our future prospects for buying, so let’s think about it in a proactive manner, rather than letting the market develop around us.”
“Being strategic doesn’t just mean being at the top table,” adds Meehan. “It means thinking about how we collectively act as a profession. What we do now creates the legacy for the future. We get the markets we buy from; we shape them. Responsible procurement goes beyond doing the right thing for your organisation. What do we want our legacy to be?”
A call to arms indeed.
Read the full paper and explore the future scenarios
Main attributes of both scenarios
Dynamic, competitive markets
Innovation driven by Titans
Price and hard metrics trump brand
Agility is key
Supply management is risk management
Systems over relationships
Strong data regulation
More, smaller firms
Social capital is brand
Stable business strategies
Emphasis on relationships